Labour looks on the cusp of rewriting Loan Charge history – that’s not before time but let’s do it properly, together

As the dust now settles on General Election 2024, which saw the largest ever number of new MPs elected and the largest number of seats changing hands, we can assert that the UK saw an election that rewrites many political records, but also, one that could potentially, hopefully, rewrite how the Loan Charge Scandal goes do down in history, writes Steve Packham of the Loan Charge Action Group.

Less positively, with the largest number of new MPs ever, many loan charge campaigners have got to start the process of explaining the whole scandal of the retrospective HMRC legislation all over again!

Gone but not forgotten

At the same time, the huge turnover saw many MPs who had been members of the Loan Charge and Taxpayer Fairness APPG – and in some cases relentless campaigners against the loan charge – stand down or lose their seats. We thank each and every one of them and wish them all the best for the future. Their support for victims of the loan charge will not be forgotten.

What has been heartening during the 2024 general election campaign is that many candidates (who were not MPs) had already heard about the loan charge “debacle,” either through our own activity or the raft of national media coverage earlier in the year.

The Loan Charge Pledge has been signed by 46 now active MPs

During the campaign, our members emailed election candidates of all colours, all over the country. Our Loan Charge Pledge 2024 called for three vital things in this parliament:

1. A new genuinely independent review – i.e. not influenced by the government or HMRC.

2. A fair resolution for all those impacted, working with professional advisers, to bring an end to the whole scandal before more lives are lost and families ruined.

3. A review of the rules around workers and the enshrining in law of the basic principle that anyone classified as a worker must receive full employment rights.

Hundreds of candidates replied, with (as is to be expected from politicians) different levels of understanding and commitment. But the vast majority expressed interest and concern even, it was notable, from some sitting MPs who had been less committed previously. Such is the power, it seems, of the ballot box when candidates want people’s vote!

Overall, 172 candidates were prepared to fully back all three points of the Loan Charge Pledge, of which 46 were elected as MPs. And as ContractorUK readers would expect, we will be asking those 46 to help deliver on all three points.

We were delighted that the party with the largest number of signatories to the Loan Charge Pledge was the victorious Labour Party with 42. This is impressive, given the concerns candidates have about making commitments when it is clear that their party will be in government!

Chancellor Reeves’ independent loan charge review pledge and its 131 parliamentarian supporters

There were many more Labour candidates happy to support now-chancellor Rachel Reeves’ pledge to hold a fresh, genuinely independent review of the loan charge. We wrote to now-prime minister Sir Keir Starmer during the election campaign about what such a review should entail.

Even more importantly for our campaign to resolve the loan charge, despite the huge turnover of MPs, there were still 115 MPs re-elected who were members of the APPG, along with 13 members of the House of Lords. Added to that, three retiring MPs who were previously APPG members were appointed to the House of Lords, so there are now 131 APPG members -- from the last parliament in the current one. Supportive MPs and peers are intending to restart the Loan Charge and Taxpayer Fairness APPG as soon as is practicable.

Good riddance

Most importantly, of course, we have a change of government.

The overwhelming feeling of campaigners -- and indeed the wider contractor and professional freelancing community -- is good riddance to the Conservative government and their well-documented ‘War on Contracting.’ With a new government and a new approach, we have fresh hope of an administration with more integrity than that shown from the previous government, and beyond the HMRC charge itself, a different approach too to freelance and contract working.

The loan charge is something that the new Labour government (which will be in power for at least the next four-to-five years) now must address. 

The whole issue of the charge, including the 10 taxpayers’ lives which it has taken, is on the desk of The Exchequer Secretary to the Treasury James Murray, as a result of how the new PM and chancellor have decided to allocate responsibilities (with the new financial secretary to the Treasury being Lord Livermore in the House of Lords). 

Labour came to power as recently as July 5th but we’re already very relieved to see a fundamental change of approach regarding answers to parliamentary questions concerning the pernicious loan charge.  

We know the loan charge is important , says Labour’s James Murray MP

Several MPs have already tabled questions about the promised, independent loan charge review and the response from Mr Murray on July 24th is heartening, because it strongly indicates that the new Labour administration is taking this HMRC-led scandal seriously.

Murray stated in response to Labour MP Blair McDougall:

“The Chancellor and I know the loan charge is a very important one for many members and their constituents. We have been considering this matter since taking office and will provide an update in due course.”

I’m delighted to further disclose to ContractorUK readers that we have been invited to meet directly with Mr Murray, who reached out to LCAG and others, including the loan charge critics and MPs Sammy Wilson and Greg Smith.

A different approach to the rotten one of the past

The fact that it was Mr Murray who asked for such a meeting so soon into the new parliament shows a fundamentally different approach to the loan charge from the last rotten government’s approach to the whole scandal. Be in no doubt -- LCAG offered time and time again to meet with and work with the government and HMRC, but this offer was routinely ignored. 

When respected tax lawyer Sarah Gabbai joined by other leading advisers wrote to the then-financial secretary Lucy Frazer asking for Treasury ministers to engage, she failed to even reply to their letter, merely passing it on to Jim Harra, HMRC’s boss. Those of us campaigning for a fair resolution of the loan charge were therefore relieved to see Frazer lose her seat at the election. And we’re now equally pleased to see Treasury ministers in place who appear to have the professional courtesy to actually respond, to be prepared to listen and to actively engage. Quite the contrast from the disgraceful approach which we, on behalf of 10 bereaved families, received from Frazer.

The importance of a proper loan charge review

We don’t expect Labour’s promised, independent, ‘Loan Charge Review’ to start immediately.

Indeed, we would rather see the review set up properly -- and by properly we also mean independently -- to avoid the nonsense of it being staffed by HMRC and Treasury officials, as the partial, flawed Morse Review saw fit to do.

The promised new review must be a review of the whole loan charge scandal, including the role of the previous government and HMRC in creating the whole fiasco.

There must also be a suspension of all related HMRC activity, to allow for a meaningful review of the loan charge and subsequent recommendations for a resolution. This means a complete cessation of all related Accelerated Payment Notices (APNs) and HMRC’s hugely controversial use of section 684 notices, as well as a stop to other loan charge-related activity. 

A real opportunity for real change -- and crucially, resolution

Finally, then, the fact is we’ve had a historical election ushering in much-needed significant change, and we now need a change of approach to the loan charge. We wish MPs a good summer recess and realise that with 335 brand new MPs, they will have a lot to get organised over the break and many issues to deal with. We will be seeking their support to ensure the promised loan charge review by Labour is a proper, full and genuinely independent relook-- and that there is a resolution to the whole scandal for the thousands upon thousands directly affected, and the many  indirectly affected, such as taxpayers’ families. 

There is now a real opportunity for real change and the real possibility of a fair resolution.

Join us in campaigning for this from James Murray and the Sir Kier Starmer-led government, to end the loan charge nightmare for everyone, once and for all.